Less than half of GOCCs have dividends

Of 114 Government-Owned and Controlled Corporations (GOCCs), only 50 had dividends. They total P32.31 billion.

MANILA, Philippines – President Benigno Aquino III hailed the increase in dividends of Government-Owned and Controlled Corporations (GOCCs) since the start of his administration, but of 114 GOCCs, less than half had dividends at all.

Under the law, GOCCs are required to declare and remit at least half of their income as dividends to the National Government. In 2013, 50 GOCCs declared dividends amounting to P32.31 billion ($741.7 million).

The number is higher than the 38 in 2012, but it is still not majority of the GOCCs.

The Land Bank of the Philippines (LBP) had the highest dividends in 2013, remitting P6.298 billion ($144.58 million), while the Philippine Amusement and Gaming Corporation (PAGCOR) had the highest total remittances at P9.791 billion ($224.77 million).

Of the 114 GOCCs, only 7 others declared P1 billion (P22.941 million) or more in dividends, including the following:

• Development Bank of the Philippines (DBP), P3.616 billion ($82.854 million)
• Power Sector Assets & Liabilities Management Corporation (PSALM), P2.5 billion ($57.35 million)
• Bases Conversion Development Authority (BCDA), P2.107 billion ($48.336 million)
• Manila International Airport Authority (MIAA), P1.577 billion ($36.178 million)
• Philippine National Oil Company-Exploration Corporation (PNOC-EC), P1.5 billion ($34.41 million)
• Philippine Ports Authority (PPA), P1.422 billion ($32.6 million)
• Philippine Deposit Insurance Corporation (PDIC), P1.05 billion ($24.1 million)
• While the number of GOCCs remitting earnings to the government is still a minority, dividends received by the government under the Aquino administration so far are higher than the dividents during the previous administration of former president Gloria Macapagal-Arroyo, according to the President.

Aquino said dividends from GOCCs reached P95.38 billion ($2.188 billion) in 3 and a half years, while from 2002-2010 under Arroyo, the total amount of dividends from the GOCCs was P81.54 billion ($1.84 million). Aquino was elected President in 2010.

Reforms

Aquino attributed the increase to reforms instituted during his term.

“The time when GOCCs were used by a few individuals to enrich themselves, when GOCCs were used as just a hang out or a parking space by groups of friends and henchmen of those in power, is over,” Aquino said in a speech at the annual GOCC Dividends Day in Malacañang on Monday, June 9.

“We have instituted reforms and as time passes, these are strengthened. We are further pursuing this push for change, and it is becoming more impossible to return to the past system.”

In a statement, Budget Secretary Butch Abad said the money earned in remittances in 2013 would be used to “widen the country’s budgetary legroom for social and economic services, especially those related to post-calamity aid.”

The dividends will also be used “to boost the government’s Unprogrammed Fund, which can in turn support rehabilitation efforts in the wake of Super Typhoon Yolanda.”

Incentives

The President cited various reform programs that paved the way for the increase in dividends.

Among them, he mentioned the GOCC Governance Act of 2011, which resulted in the creation of the Governance Commission for GOCCs (GCG). The GCG is an oversight and policymaking body in charge of GOCCs, created in October 2011 following controversies over hefty bonuses received by GOCC officials in the past administration.

The GCG has since abolished GOCCs that was deemed not needed or were seen to have irregularities. Among them include 3 that were among those linked to the mulit-million Priority Development Assistance Fund (PDAF) controversy uncovered by the Commission on Audit (COA) or the “pork barrel scam,” namely the National Agribusiness Corp (Nabcor), the Zamboanga del Norte Rubber Estate Corp (ZREC) and the Philippine Forest Corp (PFC). In question are fund releases under the Arroyo administration from 2007 to 2009.

Aside from the GOCC Governance Act, Aquino said his administration has laid out “initiatives to distance employees from temptation and corruption” and has given employees “incentives to remain in public service.”

Aquino said the government is now studying how to make GOCC personnel’s compensation closer to that of the private sector, as it attempts to find the right mix of basic pay and allowances. He said sufficient bonus and incentives will also be given to employees.

The Integrated Corporate Reporting System is being formed to “improve the coordination among genies and government corporations.”

“Once this is finished, our people can visit the website at any time. And this will give them more power to participate in good governance,” Aquino said. – Rappler.com